Acorn shifts focus from Risc projects

Restructure 75 jobs axed as vendor embraces digital TV market.

Acorn has scrapped its £2 million Risc 2 project and will cut 40 per cent of its staff in a restructuring move that leaves its future in the PC industry under a cloud.

The announcement comes after a strategic review started by Stan Boland, chief executive of Acorn, when he took the post in June.

The Cambridge-based group will focus on digital television and thin client components. It will continue to sell its existing desktop ranges, notably the Risc PC, but will transfer its logistics and systems activities to Xemplar, its 50/50 joint venture with Apple.

Acorn will cut non-engineering personnel by about two thirds and put its engineering staff onto direct revenue-earning design and consultancy work. Employee numbers will be cut from 175 to 100.

Boland said: 'Today's announcement marks a significant watershed in Acorn's history. While we are sad to be announcing the redundancies, we are making changes to Acorn's market position and business shape to recognise that its future lies as a leading player in the digital TV system components market and in partnership with other technology companies.'

The company's pursuit of this sector looks likely to spawn alliances.

'Acorn is working hard to link up successfully in this market with a number of partners and potential partners,' Boland added.

James Foulks, analyst at IDC, commented: 'We've seen a lot of companies struggling in this sector. Today, you've got to be a big player or niche player and there will be more companies during the next 12 to 24 months that will have to decide on restructuring or face going to the wall.

'Acorn's move is probably a wise one - digital TV is an area that is on the up,' he added.

The Acorn share price fell to its year low of 79.5p as a result of the announcement.